Did The Swiss National Bank Destroy Central Bank Precious Metal Manipulation?

After the SNB- Swiss National Bank dropped the bombshell on the markets Thursday morning, the prices of the precious metals have gone in one direction… UP.  In just two days, the price of gold is up $40 and silver $1.10. 

According to Kitco, gold is currently up nearly $16 and silver $.80:

KITCO Gold & Silver

While gold was a big winner yesterday, silver is up the highest percentage today.  Furthermore, the precious metals seem to be out-performing the Dow Jones Index.  This week the Dow Jones is down over 2%, while silver is up 7% and gold 4.5%:

DOW vs GLD & SLV

With the Swiss National Bank deciding to take the PAIN now (by dropping the EURCHF peg) instead of a much worse DISASTER later after the ECB prints money that would make Ben Bernanke jealous, this may be the factor that destroys the ability of the Central Banks to manipulate the precious metals.

The SNB deciding to break away from the Central Bank Policy of  “ALL FOR ONE AND ONE FOR ALL”, is likely the straw that breaks the Fiat Monetary System’s back.

There is no way to predict how events will unfold in the coming weeks and months, but rest assured, extreme volatility will likely be case as more Central Banks figure out that it’s time to SAVE ONE’S ON SKIN.

This will probably be a very positive for the precious metals.  It looks as is the SNB decision has finally destroyed the notion of $800 gold EVER AGAIN.

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29 Comments on "Did The Swiss National Bank Destroy Central Bank Precious Metal Manipulation?"

  1. Ah….don’t say “ever” but I totally agree with you. : – ) Think of what the SNB did to investor psychology: YOU CAN’T TRUST TRADING BASED ON THE CENTRAL BANKS ANYMORE. Like the London Gold Pool, we are seeing a break down in central bank trust with one another.

    If I got burned by following the SNB public’s remarks, why wouldn’t you now run straight into Gold and Silver. Think about it. If the CB’s are going to screw you, you might as well buy the anti-CB asset: gold and silver. So fuck them.

    Frank

  2. …..And Steve, you need to look into this, but gold almost mirrors the ECB’s balance sheet expansion and contractions and it has for almost a decade!

    So if the ECB is about to start monetizing bonds…..gold is going to the moon. The Germans will not only want their gold back from the Fed, but the citizens there are going to go on a gold buying frenzy. Weimar and all.

  3. As soon as the Swiss export, and with it jobs and the rest of the economy, collapses, they will make Kuroda san head of the SNB. In that way joining the MAD. Don’t think Switserland can survive with a very strong currency. I’m waiting for bullion with Exters pyramid printed on it.

  4. Not much has changed today—the US Fed is back in control. They CLEARLY capped the gains in gold and silver. Then Bullard says they might do more QE, which again the sheep go running to stocks…..since of course gold and silver are capped.

    Amazing.

    • “Not much has changed today—the US Fed is back in control. They CLEARLY capped the gains in gold and silver.”

      I agree they have a lot of tricks up their sleeve, but neither they nor the other manipulative forces “capped” the price of gold and silver today. Check the closing spot prices. I’m sure they will be trying to contain this rally next week, becasue this is a BIG DEAL to try to cap any rally. But to quote from an article:

      http://www.sovereignman.com/trends/about-that-strong-dollar-15956/

      “But a few days ago, the SNB reversed this control. They are now no longer limiting the rise of their currency.

      And the franc soared 10% almost instantly– a HUGE move for a major currency.

      Why did this happen? Because in a universe of options that only includes the dollar and euro, the dollar wins.

      But if you expand that universe even a little bit to include the Swiss franc, suddenly the real truth comes out.

      Investors have far more confidence in Switzerland than the United States. They’d rather hold francs.”

  5. On the $POG: Please don’t think for a second, that “they” lost control of gold’s paper price. Look at the chart and realize, that it’s a managed move upwards. I can only guess, what their aims are.

    Tend to think, that rising paper prices somehow increase the amount of physical gold in the western part of the system and this is, what “they” want at the moment. My proxy for this is GLD, which (for once) seems to be fully backed by physical (bar lists). Every time, they push up the paper prices, they can stop the drain in GLD for a while (or even reverse it for a week or two). You can check this for yourself.

    Then they have to go to the reverse direction, because rising paper prices have to be contained at some point. They just cannot allow $POG to thwart falling interest rates for a prolongued period of time. They are dammned to be between a rock and a hard place until the whole thing crashes and burns.

    So I try to second-guess their turningpoints, cash in 6 or 7 pc interest rate and get into the game again at a lower level. I do this with my LIMITED TRADING POSITION only.

    No opinion on silver, but it’s a different animal imho (not a cb asset). Cheers from the heart of Europe !

    • Andreas,

      The Central Banks losing control over the value of precious metals does not take place overnight… it’s on an going series of events. The Swiss dropping the EURCHF Peg is just another step in that direction…. actually a BIG STEP.

      People need to look at the Fiat Dollar System disintegrating over a period of time and in a number of steps. This was a BIG ONE.

      steve

  6. Wow! Notice that Platinum is LESS than gold. I know that this is not the only time this has happened.
    Do you know how much more rare platinum is than gold? Incredible. We are going to see the PM market explode real soon.

    • The observation is relevant. Since the demand for platinum is far less, the comparison means a more subdued upside explosion, as platinum has no significant history as money. It may be time to consider a multi-metallic monetary system however, as gold is in short supply in the West, and outside of artifacts and heirlooms in India—silver is also in short supply. We already had a tri-metallic system—gold, silver and copper. Perhaps the world marketplace, sensing short supplies of gold and silver, will again take interest in copper, and consider the PG metals also, as they are rare, fungible, and portable. We already see copper coins and small ingots/wafers offered as consolation prizes to people who can’t afford 1 ounce silver rounds. Considering the relative scarcity of silver to copper, the copper coins are priced more steeply by ratio—at present.

  7. Hold your Horses Hoss, while this move caught the masses by suprise, this move was not totally unexpected. Jason Schenker of Prestige Economics forecasted it last year. He said “…the fact that the market direction for the euro and the Swiss franc would be basically unsustainable and indefensible.” When the European Union Court cleared the way for the ECB to start unlimited QE, the Swiss had no choice. If they didn’t decouple they would be carrying the whole European Union.

    The knee jerk PM market response was also forseeable, but do not be fooled! The manipulators may let this go on for a while (maybe thru the 1stQ 2015) but they will just as suddenly pull the rug out in an effort to truly and finally kill the PM bulls and reassert their paper dominance.

    If by some miracle we make into the 2ndQ2015 without a major correction in the PMs AND if enough people see the writing on the wall then maybe, just maybe, we may see the beginings of a currency reset. Unlikely as long as the US markets continue to shuffle along and oil stays cheap.

    SteveW

    • SteveW,

      Actually several people saw this coming. Egon Von Greyez was another who forecasted this last month. It’s just a surprise when the DAY finally arrives.

      steve

  8. the reset will EVERY country will have to deposit GOLD for any trade to take place…so in the USA… prepare for empty shelves all around this nation….for our fiat will only exchange inside this country..and maybe not even here….imho

  9. Hi, I am not sure that the SNB move has anything to do with rising $POG.

    Switzerland would not dare to go against the international $-cartell all alone.They were allowed to do so, perhaps as a prelude to the destruction of the Euro. I don’t know, I really don’t know what the driving force for SNB’s decision was.

    The $-system could go for a take-down of the Euro BECAUSE of the (tight) monetary policy of the ECB. Please have a look at the ECB’s balance sheet:

    http://sdw.ecb.europa.eu/quickview.do?SIBLING_KEY=123.ILM.U2.C.LT01.Z5.EUR

    Up to now ECB has been quite tightfisted with base money – recollecting it again within a short time frame after having been forced to dish it out.

    No match for the FED and the BoJ. You know what ? ECB has been talking about european QE/expansion of their balance sheet since last summer. It never has materialized. They have been just talking AS IF they were already doing it.

    But it would be their obligation under the $ world system, especially now, since the FED is done with tapering. Maybe they have to be punished ….

    Regards from the heart of Europe.

    • Sorry, the figure does NOT show total assets or the like but base money, but the “gestalt” is basically the same

    • Andrea,
      The ECB hasn’t done it yet because 1. The Germans are dead set against it. They know it is the road to perdition. And 2, Drahgi didn’t know if he had the authority to unilaterally do it. Now that the European Union Court has given him the green light, you can bet he will start at their Jan 22 meeting.

      The FED is probably overjoyed because this situation sends vast sums to US safe haven assets like treasury bonds and further props up their system. The fact that the Swiss Franc is also now a safe haven currency is a minor complication but one that has almost always existed before the advent of the European Union. Safe haven buying is also the reason for the spike in gold and silver. Note platimun’s price is now less than golds so it is truly acting as a monetary metal at last.

      The only real question is whether the manipulators will let this continue and, if so, for how long.

      SteveW

      • SteveW, I agree with much of what you say, especially with regard to “propping up the system”. Yes, that’s why ECB is strongly urged to act. Not so sure, if the european court’s opinion is, what will prompt ECB to act on jan, 22.
        It will be a matter of politics (and of fear). After seven months of jawboning I’ll only believe it when I see it.
        The recent spike in PM prices is not at all a consequence of additional demand imo. They sell several tons of “gold” EVERY DAY over at LBMA in London (“spot”) and several hundred tons at COMEX (“futures”). That’s where the “price discovery” takes place. It is not a price discovery for physical. If there is (a misled) save haven demand for paper gold,it’s small fries in comparison with all the “business as usual” paper contracts. Andreas

        • Andrea, In 2010 the Swiss franc was equal to .7 euros, by the summer of 2011 it was .83 Euros. The Swiss were afraid that their currency, the franc, was getting to strong and that they would lose their competitiveness in the European markets. They decided to peg the Swiss franc to the euro at 1.2 Swiss francs to 1 Euro. For the next three years they printed millions and millions of francs in order to buy euros to maintain the 1.2/1 ratio. When the European Court gave Draghi the ok to QE the Swiss had no choice but to depeg their currency. The reult, in less than 48 hours is the ratio is now 1.007 francs/1 euro, with further devaluation of the euro coming. Some are projecting the euro will be on par with the dollar by year end.

          The price of gold in euros has been going up for some time as the value of the euro drifted lower, the Swiss just opened the flood gates. The SPDR Gold Trust EDP jumped 1.9 percent to 730.89 metric tons on Jan. 16. That’s the biggest gain since May 25, 2010. This week the holdings climbed 3.3 percent. This is what safe haven demand does to a market when the is a major currency devaluation, In this case the euro. One can only imagine what will happen to the price of gold when the FED is forced to devalue the dollar because they can’t service the debt/liabilities.

          The EU WILL start a major QE on the 22nd. This will only makes matters worse and excelerate the worlds total fiat currencu collapse.

  10. Hey where did all the trolls go?pulp fiction you rogue,I know you’re out there hiding.ho-de-ho.

  11. Funny thing is, the SNB announcement is bearish for PMs.

    1. the Swiss won’t print as much new currency.
    2. many will see the appreciating Franc as an alternative to PMs.

    This rally will not last. COT is already in bearish territory, and that is with the survey day being Tuesday, when prices were still a couple of % lower. The COT in the past has almost been a foolproof indicator of short- and medium-term price movements.

    With oil prices being down this far, it should be expected that miners greatly benefit from it, and will be able to lower production costs even further. This should help the price suppressors. I am looking forward to first quarter data for verification.

  12. Shush! Its kinda obvious really, but wouldn’t now be a really good time for the SNB to buy gold with its strong currency?

  13. Or….how about this explanation: manipulation is a fact of life. Eventually fundamentals and reality win over manipulation.

  14. Robert Happek | January 18, 2015 at 3:36 am |

    Many interesting comments, but nobody mentioned a very important fact: The Swiss buy and sell a lot of physical gold, more than two thousand tons per year. They have the largest gold refineries and gold storage facilities in the world. So it is not a surprise that the price of gold did follow the unpegging and revaluation of the Swiss currency.

    Regarding the decision of the European court effectively permitting the ECB to buy government bonds, one should recall that this decision was requested by the German supreme court. This legal decision is therefore also a binding decision for the German government. The German government will not be able to prevent the ECB to print more money because that printing was in effect sanctioned by the higher German court.

  15. Some interesting and thought-provoking comments as usual here.The title of the column is:

    “Did The Swiss National Bank Destroy Central Bank Precious Metal Manipulation?”

    A good title but I think the answer is no it didn’t. Just a wrinkle, ripple, pothole, or speed bump on the manipulation highway.

    The manipulation, like on the COMEX, is alive and well.

    This post is being left Sunday; I expect silver to close lower Monday; perhaps bombed in the early hours of trading, when in a free market few would be trading.

    In the past writers referred to “managed retreat” as the term for the price rise of PM’s when TPTB wanted to make PM’s appear to be a poor investment relative to fiat currency investments. Since then the HFT computer tactics have been perfected. The manipulators must have been assured the worst they would face is a fine substantially lower than their profits from manipulations. And the dedication to manipulation is fierce. The spring gets ever-more compressed.

  16. Take heart all Ye Silver Stackers! The one thing this “dry run” demonstrates is that when TSHTF, silver vastly out performs gold. Gold went up 4.45% but sister silver went up 7.20% – 60% better than gold.

    Keep on stacking. Buy for cash and stash.

    SteveW

  17. All the SNB did was indicate that they won’t print new francs as quickly. That alone is bearish for gold. I think gold rose because the SNB move convinced many people that the ECB will do QE. The SNB simply could not keep buying enough euros to maintain the peg without creating a problem for the franc.

    We have not seen the cartel smacking of gold and silver in 2015. That is very strange to me. It’s as if they have a new policy in 2015. The raids we so often saw where bids were taken out, stops were triggered, and margin calls were created, followed by a smal bounce in price at the bottom, are nonexistent since Jan. 1. So there is the slight chance that the west essentially ran out of gold and the policy of holding gold down in the typical way is off the table.

    Mike

  18. There is a great storyline, the manipulators can use to explain their upcoming smash of gold. It is the relation gold oil (GOR). It has ranged from 13 to 16 for decades, i.e. (13 or so) barrels crude for 1 oz. of “gold”. Now GOR is 26 because of cheap oil.

    I literally can hear them gloat already: “What do you want ? Gold was way overvaluated !”
    I personally don’t think, that they will try to cut it in half because that would lethal wthin a short time. But maybe they go for minus 25 or 30 per cent. Andreas

    • Don’t think they’ll “smash” it like 5 years ago. This would be too risky. They’ll manipulate it lower over several weeks, the same as they did on the upside.

  19. The manipulation ends once the CONeX defaults one way or another. As long as they set the price and trade ~100X more paper gold than there is physical available the manipulation is ON. The current pricing mechanism is the manipulation. The east will need to finish sucking them dry, but then the bombs may go off… It will get ugly before all is said and done in the PM pit.

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